The Restaurant Group has conditionally agreed the purchase of Wagamama in a deal that values the company at £559m.
In confirming the deal, the Restaurant Group said a number of its existing sites would be converted to Wagamama restaurants accelerating its UK roll-out. The new owner will also look to expand its concessions and delivery presence as well as exploring international options.
The owner of Garfunkel's, Frankie & Benny's and Chiquito has emerged as the buyer after Goldman Sachs was appointed to "review strategic growth options" for Wagamama earlier this year. This was on behalf of its owners, UK-based private equity firms Duke Street and Hutton Collins, who bought the company from Lion Capital in 2011 for a rumoured £215m.
The Restaurant Group CEO Andy McCue said: "This transaction is an exciting and transformative opportunity to create a business which can pursue a truly multi-pronged growth strategy and create substantial value for our shareholders.
"Wagamama is a fantastic brand, with a market-leading pan-Asian proposition which has consistently outperformed the casual dining market in recent years. Central to this success has been a cohesive culture and clear brand values which are focused on making the right choices for customers."
Wagamama, which was founded in London in 1992 by restaurateur Alan Yau, has 130 restaurants in the UK, five in the US in New York and Boston and 51 franchises around the world.
The Restaurant Group has said Emma Woods, currently Wagamama's chief growth officer, will be appointed CEO of the brand, taking over the position from Jane Holbrook who was appointed in 2017.
The purchase will be funded by a cash, new debt and a rights issue expected to raise approximately £315m.
Despite the problems plaguing UK high street casual dining brands, Wagamama recently recorded 208 consecutive weeks of UK market outperformance, and over the past four years has outperformed the market by 8.2%, according to the Coffer Peach Tracker.
The Restaurant Group posted losses across the board in its results for the first half of the year to 1 July, including a £5.4m drop in earnings, and has put a further nine of its former sites on the market in addition to the 31 already sold. The Restaurant Group operates more than 500 sites across the UK.